Politics
Prime Minister Benjamin Netanyahu was congratulating himself on getting his retaliation in first. On Saturday night, he sacked Minister of Defense Yitzhak Mordechai on live television, following the latter’s negotiations to join the new centrist party. Yesterday, Netanyahu began to feel the force of Mordechai’s righteous anger. At his last cabinet meeting, Mordechai invoked the prophet Samuel’s dismissal of King Saul: "The Lord has torn the Kingdom of Israel from thee this day, and given it to a neighbor of thine that
is better than thou."
After bitter exchanges with the Prime Minister, Mordechai stormed out, and embarked on his campaign to replace Netanyahu, visiting the Western Wall and Rabbi Ovadia Yosef, his own and the Shas party’s spiritual mentor.
Current leading candidate for the vacant defense portfolio is Moshe Arens, who today challenges Netanyahu in the Likud leadership elections. The Labour Party has indicated it will support Arens’s appointment. Netanyahu has meanwhile canceled his trip to the World Economic Forum meeting at Davos.
Business
The Raddisson-Moriah hotel chain went to Koor Tourism for $85.1 million. Underbidder Dan Hotels refused to add to its $80.25 million offer.
US authorities are expected to approve the merger between software houses Platinum of the US and Memco of Israel by mid-February. Memco will become Platinum’s development center.
Elbit and Elscint filed their response to the application to bring a class action against them over the sale of Elscint’s imaging division. The application relates to allegations of lack of due disclosure and insider dealing.
Insurance company Ayalon has become the first in Israel to offer Bug 2000 cover.
Possible moves are afoot on two deregulation issues. The Ministry of Communications is reported willing to postpone abolition of Bezeq’s inland calls monopoly to June 1, and amend the Arrangements Bill to that effect, if this will avoid making the move "a hostage of Bezeq’s employees." The Ministry of Transport is considering introducing other operators on the Egged cooperative’s main bus routes.
Economy
The growth in foreign currency credit has slowed. Bank of Israel figures showed that the balance rose 7.2% in 1998, to $29.8 billion, compared to a 17.8% rise the previous year. Increased use of currency risk hedging instruments is also reported.
In advance of today’s interest rate decision, Governor of the Bank of Israel Yaakov Frenkel said the upcoming elections would not be a factor in setting rates. He added that the Bank of Israel’s policy of non-intervention in the foreign currency market had proved to be correct.
Capital Market
Trading on the Tel Aviv Stock Exchange was uneventful. The Tel Aviv 100 index fell 2.04% to 294.88 points; the Maof index was down 2.15% to 302.27 points. Total turnover amounted to NIS 133 million.
Highest turnover was in the Israel Corporation 1 share, which fell 1.8%. Only two Maof shares managed rises - Nice (1.7%), and Blue Square Properties (1.6%).
Holocaust Deposits Affair
The US and Swiss governments are attempting to draft a joint communique that will end their dispute over the treatment of deposits belonging to clients of Swiss banks who perished in the Holocaust.
At the weekend, a detailed agreement between the Jewish organizations, the major Swiss banks, and the lawyers who filed class actions against them, was signed in New York. UBS and Credit Suisse are to pay out $1.255 billion plus interest. The agreement is subject to court approval.
Published by Israel's Business Arena on January 25, 1999